While it is her job to be optimistic about the state of real estate investing, Rebecca McLean believes her industry research backs up her sentiment.
Rebecca, the Executive Director of the National Real Estate Investors Association (National REIA), shared her research into the state of the real estate industry during her keynote presentation at Equity Trust’s recent Wealth Building Summit. She shared that individual investors continue to make up a large share of the real estate investment market, and that number continues to increase.
Rebecca provided several takeaways about how the real estate industry might take shape in 2019, including these five points:
1. You can’t ignore Millennials: Millennials make up 68 percent of first-time buyers, according to the Federal Housing Administration (FHA). This is worth noting because research shows they shop for housing differently and value different amenities than previous generations, Rebecca said.
Trends involving Millennial house hunters, provided by the FHA, include:
- They want more space – not necessarily for children but for pets and belongings
- They’re increasingly moving to the suburbs – 49 percent seek a place in the suburbs, compared to 21 percent looking to buy in an urban setting
- 50 percent of millennials want to be able to walk to shops and restaurants from home
2. Consider the unique housing needs of seniors: Another growing demographic among buyers and renters is the senior citizen population. The U.S. Census Bureau projects that by 2035, older adults will outnumber children for the first time in history.
Investors may want to consider making investment properties more senior-friendly with amenities such as grab bars in restrooms and first-floor bedrooms, Rebecca said.
3. Starter homes becoming more scarce: More homeowners are choosing to stay in their houses longer, according to the U.S. Census Bureau, which means that fewer starter homes are coming onto the market.
4. Seek larger trends when choosing where to invest: Rebecca suggested that real estate investors do their own research into an area before buying a property – especially for out-of-town investments. Research should include the employment rate in that area, and several other factors such as the likelihood of a natural disaster and the number and type of crimes committed
5. Foreclosures are on the decline: Foreclosures have sharply declined throughout the country compared to the Great Recession. The foreclosure rate was .51 percent in 2017 compared to 2.23 percent in 2010, according to Attom Data Solutions. Rebecca concluded that real estate investors can be optimistic about the industry in 2019, but not blindly so.
“Do your due diligence, pay attention and ride this beautiful wave while we can,” she says. “It’s a great time to be where we are and it’s a great time to be in the self-directed IRA industry because the opportunities are so great.”
From our friends at Equity Trust